Venture Portfolio Fund FAQ

Investor Onboarding

I’m interested in investing in VPF. How do I proceed?

Investor Sign-On and Capital Commitment Process
The VPF will be available through the Equitybee platform in the main directory listing of available offers. Click the VPF tile to view the offer page and reserve your allocation. You will be prompted to complete your investment account and review/sign the investment documents. Once approved by the Broker Dealer, you will be approved for the investment. Upon closing of the Fund, the wire instructions will be shared through the platform.

If I’m investing through an entity, under whose name should the account be established?

The investment account should be established in the name of the individual or the entity that will be making the investment. For instance, in the case of a Trust, the Trustee should sign up as the investor and create the investment account as a Trust. Specifically, the Trustee would select "Entity" for the first section and then select “Revocable Trust” or “Irrevocable Trust”, depending on how it is set up. The Equitybee team would be happy to hop on a call to walk you through the process if interested.

Terms & Fees

What are the terms of VPF?

Target fund life: 5 years
Investment period: ~12-18 months
Annual Management Fee: None
Brokerage Fee: 5% applied when capital is deployed to each underlying investment
Carried interest: 10% applied at the VPF level
Minimum commitment per investor: $100,000

Equitybee Investment Structure

How does Equitybee work?

Equitybee is a marketplace to bring investors and employees needing stock option funding together. Equitybee gives investors access to these startup companies by funding employee stock options.

  • Investors provides capital
  • Employee uses capital to exercise stock options
  • After a company liquidity event, employee pays investor:
    • Principal Investment
    • Any accrued annual interest
    • Percentage of total value at time of liquidity event
What makes Equitybee different from a Secondary?

The secondary market allows VC funds and other stakeholders that invested in the company in the very early stage the opportunity to realize their investment before a potential initial public offering (IPO). So, venture investors are selling earlier investments at later stage valuations. When investing in a secondary, you directly own equity in the company and are represented on the cap table.

Investing with Equitybee allows you to invest in later stage companies, but at earlier stage valuations, via vested employee stock options. The investment is in the form of a variable forward contract, and at the time of a successful liquidity event, the employee pays the investor the relevant proceeds. You own an interest in the forward contract, not in the underlying stock. The employee retains ownership of the equity throughout the process, but may choose to settle in publicly traded shares after a liquidity event.

Strategy & Investment Process

How good is Equitybee at picking companies?

The VPF will be passively managed; Equitybee will not actively pick companies for the Fund. Equitybee will manage the VPF in a manner similar to an index fund of pre-IPO companies. The VPF aims to provide investors with exposure to a broadly diversified portfolio of 100+ pre-IPO companies invested at discounts to the last known common share price, driven by Equitybee’s proprietary multi-trial simulation model. Importantly, the traditional venture capital model (i.e., less diversified, access constrained portfolios) relies on a small number of investments to generate a fund’s vast majority of returns (this is known as Power Law). However, research shows that larger portfolios (100+ companies) tend to increase the likelihood of generating higher returns and decrease the dispersion of returns.

How are you determining company valuations?
    1. Equitybee does not obtain valuation information about portfolio investments directly from the underlying companies. Instead, the VPF investment criteria is designed to look at the indicative value of available offers on the Equitybee platform which rely on certain metrics. As part of the investment criteria:
      1. The VPF shall only invest in portfolio investments whereby the portfolio company: (i) has a presence in the United States and employees who reside in the United States; (ii) the latest indication of value was established on or after September 1, 2022; (iii) minimum capital raised is $25M; and, (iv) received funding from a renowned venture capital group;some text
        1. *Top Tier venture capital group is defined as either (1) a venture capital firm having raised at least one top-quartile performing fund between 2000-2020 as per Pitchbook’s classification, or (2) an investment firm (or subsidiary of a larger company) with at least $250 million in AUM.
      2. VPF shall only invest in portfolio investments compliant with #1 above where the Private Financing Contract (“PFC”) entered into includes the following metrics: (i) Interest Rate greater than or equal to 3% and (ii) Share Incentive Percentage greater than or equal to 20%;
      3. VPF shall only invest in portfolio investments compliant with #1 and #2 above provided the Closing ROI (“ROI”) (as provided on the Platform for day one return on investment) is greater than or equal to 30% based on the last known 409A share price.
    2. Equitybee sources offers by looking for different types of "indications of value" sourced after September 2022, including (1) secondary prices (assuming there is an active secondary market for the target company), (2) tender offers, (3) new primary rounds, (4) updated 409A valuation, etc. Specifically regarding 409A valuations, this fair market valuation of common shares is obtained pursuant to the US tax code for privately-held companies in the US when granting employee stock options. Companies issue an updated 409A valuation at least once every 12 months. Some companies obtain 409A valuations more frequently, such as those experiencing a new liquidity event, fundraising round, or material changes to the company. 409A valuations are conducted by third party evaluators, who take into account a company’s latest share price, public comparables, existing liquidation preferences, market sentiment, etc. Importantly, Equitybee reviews evidence of the most recent 409A value from employees seeking stock option funding as part of its due diligence of each deal. With the market downturn in the last few years, we have seen lower 409A valuations in general, which means that companies with 409A valuations that have either increased or remained flat since September 2022 (all else being equal) are potentially still growing and performing reasonably well.
How do you size each investment within VPF, and what is the highest allocation permitted in any one company?

VPF will have exposure to at least 100 portfolio companies and the maximum investment allocation is 1% per portfolio company.

How do you balance access and conflict across VPF, other Venture Portfolio Funds, and the platform?

At any given moment, Equitybee will keep a list of target companies and associated deal terms which meet the VPF’s investment criteria. During this period, the offer will not be available for investment through the Equitybee platform and, if fully allocated, may not ever be available for investment by platform investors. Importantly, in case an offer matches the investment criteria of more than one managed fund, the Fund which added that company to their target list first receives priority. Equitybee will periodically refresh and revise the VPF’s target list to account for changes in the marketplace which may impact a target company’s eligibility to the investment criteria. Finally, if the offer is not fully invested by any of the existing funds, it will be posted to the platform and become available for investment by platform investors. For instance, if an employee needs $200k of which VPF may only contribute $85k for diversification purposes, other funds / platform investors will have the opportunity to fund the remaining $115k.

Does the underlying model upon which the investment thesis was built assume that cash distributions will be reinvested in VPF?

The model does not assume that fund distributions will be reinvested into VPF (i.e., there is no capital being recycled here). In fact, the model assumes that every dollar generated by the strategy through liquidity events will be immediately distributed. The VPF will make distributions to investors on a regular schedule, pursuant to the Fund’s Operating Agreement.

How has the model been stress-tested? What are the key risk assumptions that you're factoring in?

For each iteration of our Monte Carlo simulation, the model generates (1) hypothetical portfolio investments randomly distributed within the Fund's investment period (deal terms are also randomly generated based on Equitybee's historical deal flow), and (2) random exit events based on historical return distributions across economic cycles. Finally, we've stress-tested several model inputs, including (1) optimal portfolio size, (2) optimal portfolio mix across company stages, (3) investment period, (4) fund term, (5) historical return distributions, and (6) historical median time for portfolio investments to exit.

Does the model assume that Equitybee is able to screen out bottom quartile performers, or are low performing companies included in the model?

The model does not assume that Equitybee will  filter out the bottom quartile performers. As mentioned before, the model randomly generates exit events for each individual portfolio investment based on historical return distributions. 

How does Equitybee source supply, and how much can they get?

Equitybee is a well known company in the employee option funding space, and with an estimated $30 billion worth of options going unfunded each year, there is plenty of supply.  Because of our leading position in the field and the huge amount of options needing funding each year, it is a matter of matching supply with our investor demand.  We have presented over 1,700 investment opportunities to our investor community, valued at $200M+.

*Source: Total Offers/$ Supply (2020 - 2023)

Fund & Deal Structuring

How do the mechanics of the company shares work in terms of preferences and liquidation?

Due to the fact that the VPF will be funding employee stock options via a forward contract, and not purchasing the actual shares, the employee is obligated to pay back the original investment amount, interest, and a portion of the gross proceeds before they are permitted to keep any proceeds from a successful liquidity event. As such, VPF will enjoy liquidation preference over the employee.

Can I fund this opportunity via my own fund?

Assuming your fund meets all compliance/regulatory requirements, including accredited investor qualifications, it shouldn't be a problem. We may require additional details as the Fund intends to rely on the Section 3(c)(1) or Section 3(c)(7) exemption from registration under the Investment Company Act of 1940, as amended. Please start the signup process and select the relevant entity type.

Can other funds / platform investors fund the same employee?

Yes. Other funds / platform investors can provide capital to the same employee. 

Liquidity Events

What happens when the liquidity event is in the form of private shares?

If the shares of a private company are freely transferable, then it will be considered a liquidity event, which is defined as an acquisition, merger, initial public offering (IPO), or any other event at the company that allows shareholders to cash out some (or all) of their shares. Otherwise, the employee is not able to settle the agreement, and it is not considered a liquidity event. In other words, upon a liquidity event, if an employee gets paid with shares of a private company that aren't transferable, the position will remain open until that employee can transfer / sell the shares and settle the agreement.


Can you elaborate on default risk and historical defaults?
    1. Due to the fact that VPF will be funding employee stock options via a forward contract, and not purchasing the actual shares, the employee is obligated to pay back the original investment amount, interest, and a portion of the gross proceeds before they are permitted to keep any proceeds from a successful liquidity event. As such, counterparty risk does exist within each transaction. Equitybee has a multi-layered approach to mitigate counterparty risk, including:
      • Comprehensive due diligence on each employee. Prior to adding an offer to the platform, a thorough credit and background check is conducted on the participating employee. Equitybee Securities (our Broker Dealer) reviews check credit scores, past due payments, liens, criminal charges or convictions, and screens for potential red flags. Additionally, Equitybee verifies each employee’s options grants, including grant prices and vesting schedules.
      • Ongoing communications with funded employees
      • Contractual protective clausessome text
        • Liquidation preference
        • Restrictions on sale of shares
        • Spousal consent
        • Power of Attorney
    2. Historically, this risk has proven to be minimal across the Equitybee platform. Specifically, out of 858 funded employees since inception, Equitybee has only experienced two defaults totaling ~$34k. 
What happens if Equitybee goes out of business?

At a company level, Equitybee has a robust Business Continuity Plan in place that covers the business from multiple angles. Additionally, legally speaking, VPF operates under a Delaware limited liability company, which is a standalone entity, distinct from Equitybee Inc. and its subsidiaries. In an unlikely scenario of Equitybee going out of business, a new manager would be appointed and VPF would continue to exist/operate regularly. In short, from a business continuity perspective, the capital in VPF is not at risk nor would VPF's performance be impacted.


Do startup employees need board approval to work with Equitybee?

No. Our framework allows employees to bypass their employers’ consent. That said, historically, we have seen employers being very supportive of their employees working with Equitybee as this is a way for them to participate in the success of the companies they’ve helped build.

Do you require employees to put up any of their own cash alongside VPF as part of the exercise?

No, we don't require employees to use their own cash. However, note that some employees choose to self-fund a portion of their options while using funding from Equitybee to fund the remaining amount. 

Will investors be issued annual K1s from Equitybee?

Yes. Equitybee’s fund manager will process and distribute K1s to investors on an annual basis (if applicable).

What are the differences and similarities between VPF and a secondary fund?
    1. The main differences between VPF and a traditional secondary fund are:
      • Investment Access: Traditional secondary funds usually acquire shares from early investors / founders / executives, which is a time-consuming process that requires company and board approval involving ROFR provisions. As a result, secondary funds enjoy very limited investment access. On the other hand, VPF will fund startup employees' stock options through the Equitybee platform using forward contracts, which allows VPF to  gain exposure to virtually any startup in the market without needing company/board approval.
      • Discount investment price: VPF will leverage Equitybee’s unique investment framework that allows for entry prices that are typically more compelling relative to those of secondary funds (e.g., Equitybee's historical median discount is ~76% relative to a company’s most recent preferred share price).
      • Investment strategy: VPF will target a largely diversified portfolio of 100+ companies, whereas typical venture secondary funds will target more concentrated portfolios of ~20 companies. However, research shows that larger portfolios (100+ companies) tend to (1) increase the likelihood of generating higher returns and (2) decrease the dispersion of returns. Note that venture secondary funds will typically target net IRRs of 15%-20%.
      • Fund term: Our target Fund term is roughly half the typical duration of a secondary fund (note VPF is structured as a 5-year fund vs. 8-10 years for secondary funds).
      Source for preferred share price discount:Share Price Discount Calculations
Who is paying the capital gains taxes on the stock option gains?

The capital provided by VPF to startup employees cover both the exercise costs and associated taxes.

Is VPF open to offshore investors?

Yes. VPF is open to international investors as long as they meet all compliance/regulatory requirements, including accredited investor qualifications.

Who we are

What is Equitybee?

Our mission is to empower startup employees to participate in the success of the companies they helped build. While receiving employee stock options should be a life-changing financial opportunity, the value of these options remain inaccessible and illiquid until an exit event. In addition, employees who leave their company prior to an exit often can't afford the exercise cost. We’re here to fix this problem. By utilizing our global investor network, employees can get the funding they need to exercise their options and become shareholders in their companies. At the same time, we give employees the ability to create liquidity for some of their equity immediately, without forfeiting their ownership. This gives startup employees a unique opportunity to truly take control of their financial futures. 

How does Equitybee work?

We accept funding requests from employees of high-growth, VC-backed startups. These requests are presented as investment opportunities to our global network of investors, who provide employees with the funding they need. In exchange, employees agree to share a portion of the future stock value with the participating investors following a successful exit.

Who has Equitybee helped so far?

To date, we've helped over 2,000 startup employees exercise their stock options and become shareholders. Our platform features hundreds of leading startups across a wide range of industries, including fintech, artificial intelligence, education, healthcare, cleantech, and others.

Have any of the employees who used Equitybee experienced successful exits?

Yes, many of the employees who received funding from our investor network have experienced successful exits at the companies they helped build. Examples include XM Cyber, Vdoo, Siemplify, TinyTap, Totango, Avanan, Innovid, Finaro (formerly Credorax), ironSource, Riskified, Global-e, Taboola, Outbrain, Payoneer, SentinelOne, WalkMe, Otonomo, Arbe Robotics and many more.

When was Equitybee founded?

Equitybee was founded in 2018. Since then, our community has grown to over 40,000 startup employees and accredited investors worldwide. We operate in both the United States and in Israel.

Who are Equitybee’s founders?

Equitybee was founded by childhood friends Oren Barzilai, Oded Golan, and Mody Radashkovich, who have a combined 45 years of experience in the technology and finance industries. After seeing many of their friends and colleagues lose out on a significant part of their compensation because they couldn’t afford to exercise their stock options, Equitybee’s founders started this company to help startup employees own their hard-earned shares.

Who has invested in Equitybee?

We’re backed by top-tier VCs like Group 11, Greenfield Partners, Battery Ventures, and Zeev Ventures.

Privacy & security

Is Equitybee regulated by any regulatory agency?

Securities on our platform are offered through EquityBee Securities, LLC, a broker dealer registered with the U.S. Securities and Exchange Commission (SEC), a member of FINRA (Financial Industry Regulatory Authority), and a member of SIPC (Securities Investor Protection Corporation). Equitybee Advisors is the investment advisor to the VPF and owes a fiduciary duty to the funds it manages. Equitybee Advisors is an exempt-reporting advisor. Exempt Reporting Advisers are investment advisers that are not required to register as an adviser with the SEC or state regulators, but must still report public information via the IARD/FINRA system.You can learn more about these entities at

How will my information be used and stored by Equitybee?

We respect and are committed to protecting the privacy of anyone who accesses, uses, or engages with our website or any of our online services. Please read our Privacy Policy to learn about the specific ways your information may be used and stored.


What is a liquidity event?

A liquidity event is an acquisition, merger, initial public offering (IPO), or any other event at the company that allows shareholders to cash out some or all of their shares.

What happens after a liquidity event?

Following a successful liquidity event, the VPF will receive its principal, interest, and a portion of the stock value. When a liquidity event occurs at a price per share less than the investment price per share, VPF first receives all available funds to recoup the original investment amount. The employee will not receive any proceeds in this event. The employee has the option to settle in either cash or shares after the end of any applicable lockup period. If VPF receives shares after a liquidity event, the Manager will first sell the shares before distributing cash to investors.

How do you ensure the transfer of payments from employees?

Employees have a contractual agreement to settle the transaction immediately after a successful liquidity event, subject to any lockup period, if applicable. That being said, funding employee stock options carries the counterparty risk that the employee breaches their contract. In the event of a breach of contract, we would take legal action to force compliance with the contract terms.

What happens if the portfolio company goes out of business?

If the portfolio company goes out of business, the Fund will not receive its initial investment back, or any accrued interest. The Fund will mark the position to zero.

What happens if the portfolio company goes out of business?

If the portfolio company goes out of business, the Fund will not receive its initial investment back, or any accrued interest. The Fund will mark the position to zero.

Website FAQs:

    1. Getting started
    2. Why should I use Equitybee?
    3. With Equitybee, you gain unique access to high-growth, VC-backed startups, a previously inaccessible asset class. By funding employee stock options, you come in at past company valuations. 
    4. What are the risks of investing via Equitybee?
    5. Startup investments are highly speculative, carry a high degree of risk, and are not suitable for every investor. Some of the companies presented on our platform will never have successful liquidity events, and there is no secondary market for our products at the moment. Meaning, your investment will be highly illiquid, and loss of invested capital is possible. Finally, funding employee stock options comes with the counterparty risk that the employee breaches the contract.
    6. What type of companies can I invest in?
    7. Our platform features leading startups across a wide range of industries, including financial services and insurance, AI/ML, education, healthcare, hardware, cleantech, transportation, logistics, cybersecurity, space, robotics, precision manufacturing, nano-tech, AR/VR, IoT, marketing and advertising, agriculture, biotech, telecom, technology infrastructure, e-commerce, gaming, and entertainment. Most companies on our platform have raised at least $50 million in funding, are backed by well-known venture capital or private equity firms, and have completed at least one funding round over the last three years.
    8. Does Equitybee perform background checks on employees using the platform?
    9. Yes. We perform both background and credit checks on employees seeking funding to exercise their stock options.
    10. Who can invest through Equitybee?
    11. Our offers are available only to accredited investors. To determine whether you qualify as an accredited investor, sign up as an investor and go through our quick onboarding process.
    12. Who is an accredited investor?
    13. The Israeli Securities Law generally defines accredited investors as individuals who have at least one of the following:
    14. 1. The total value of the investor’s cash, deposits, financial assets, and traded securities exceeds NIS 8.3 million.
    15. 2. In the past two years, the investor’s income exceeded NIS 1.25 million or NIS 1.88 million for their family unit (household members or others who are financially dependent on the investor).
    16. 3. The total value of the investor’s cash, deposits, financial assets, and traded securities exceeds NIS 5.23 million, and the investor’s annual income in each of the past two years exceeded NIS 628,000  or NIS 941,000 for their family unit.
    17. Is this a crowdfunding platform?
    18. No. We do not facilitate capital raising for private companies.
    19. Is this a secondary trading platform?
    20. No. We do not facilitate the purchasing of shares directly from employees.
    21. The investment process
    22. How does the investment process work?
    23. As part of your registration, you’ll be asked to provide us with basic information about yourself, your accreditation status and your investment interests. You’ll then be presented with various investment opportunities, select those that interest you, and choose your investment amount. Next, your Investor Relations Manager will walk you through the rest of the process and answer any questions you may have. Finally, you’ll provide confirmation for  your accreditation status, sign the funding agreement, and wire your investment to our paying agent.
    24. What fees do I pay?
    25. Upon funding an employee's stock options, investors pay a fee of 5%. Following a successful liquidity event, if any, you may also pay a carry percentage of 5% of the remainder in excess of the original investment amount.
    26. Can I ask to invest in a specific company?
    27. Yes. Once registered, you will be able to add companies and industries of interest to your Wishlist. You’ll also be able to filter offers by VC, total funding raised, offer terms, and more. If you are interested in a specific company that’s not currently featured on our platform, please let us know by contacting us at
    28. What is the minimum investment amount?
    29. The minimum investment amount accepted by Equitybee is $10,000 per offer.